When you work, your employer will give you a pay stub when you get paid, even if you use direct deposit. Understanding the information on the pay stub is vital to managing your money and budgeting, according to the Kentucky Higher Education Assistance Authority (KHEAA).

Each company’s pay stub is different, but all employers must include these items:

·Gross Pay: This is what you earned that pay period before any taxes or benefits, such as insurance, were withheld.

·Net Pay: This is your take-home pay after all the taxes and benefits have been deducted from your gross pay.

·Federal Tax Amount: Federal income tax might be abbreviated as Fed Tax, FT or FWT. This is how much was withheld to pay your federal taxes, based on the W-4 form you filled out when you were hired.

·State Tax: State taxes might be abbreviated as St Tax, STW or simply by the abbreviation of the state in which you reside (for example, KY).

·Local Tax: Some cities, counties or school districts may require you to pay a local tax. You may not have this tax withheld if you don’t live or work in an area that assesses these taxes.

·Social Security Tax: Social Security tax might be abbreviated FICA, SS, SSWT or OASDI. The federal government requires that 6.2 percent of your wages be withheld.

·Medicare: Medicare tax might be abbreviated MWT or Med. Like Social Security taxes, the federal government requires that 1.45 percent of your wages be withheld.

·Year-to-date (for pay and deductions): The year-to-date fields show how much you have earned up to that point as well as what has been deducted for each tax or benefit.

KHEAA is the state agency that administers Kentucky’s grant and scholarship programs, including the Kentucky Educational Excellence Scholarship (KEES). It provides financial literacy videos at http://itsmoney.kheaa.com. KHEAA also provides free copies of “It’s Money, Baby,” a guide to financial literacy, to Kentucky schools and residents upon request at publications@kheaa.com.

To learn how to plan and prepare for higher education, go to www.gotocollege.ky.gov. For more information about Kentucky scholarships and grants, visit www.kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926, ext. 6-7372.